California Leads US States With Over $1 Trillion State and Local Debt

At the end of 2023, U.S. state and local governments collectively held $6.1 trillion in debt, averaging about $18,400 per American, according to a Reason Foundation analysis. California leads with the highest total state and local debt exceeding $1 trillion, followed by New York with $798 billion and Texas with $550 billion. On a per capita basis, New York tops the list with $39,491 in state and local debt per resident, more than double the national average, while Connecticut has the highest state government debt per resident at $26,187. Washington state, ranked 10th nationally, carries $143 billion in total state and local debt, or $18,500 per person, with concerns over borrowing despite fully funded pension funds. The debt includes a wide range of obligations such as bonds, loans, public pensions, and retiree health care, with long-term debt being a significant factor in states like California. These fiscal challenges highlight the need for sustainable reforms as many states face budget pressures amid slowing revenue growth and rising program costs.